Lowering of interest rates through balance transfers

If you're like a lot of Americans you have credit card debt, and you are probably paying interest on that debt. The question that you need to ask yourself is what kind of interest are you paying? Many people don't know what kind of interest they are paying, especially because they may have three or more credit cards on which balances are carried. The average American holds around four credit cards and the average interest rate for each credit card is slightly over fourteen percent.

If you carry a balance on your credit cards, you should definitely try and lower your interest rate. It can be as easy as just calling your credit card company and asking if the company can lower your interest rate or if they have any specials. If you carried a thousand dollars on a credit card and had to pay fourteen percent, you are paying $140 in interest a year. If you call and the interest rate is lowered to eight percent, you pay $80 in interest and save yourself $60 a year. Think about that simple cost savings from a phone call.

Staying in contact with your credit card has paid off for me more than once. The first time I called my credit card company was when interest rates were dropping tremendously a couple of years ago. Across my 3 credit cards I was able to lower the interest rate to the lowest possible prime rate at the time. Another time I called my credit card company I saw on my statement that they had charged me a late fee, I had missed the date by one day! 35$ because I missed it by one day, first time I've ever been late on a payment. I called my credit card company and immediately had it removed. Next statement I compared the amount paid between both payments, they had tripled the amount of interest I was paying each month. Ridiculous! right? So I called my credit card company asking them what the hell are they thinking, to which they informed me, "you missed your payment, and in your contract it states if you are late on your payment we raise the interest rate on your card to 24%+." I explained to them once again what a great customer I was and they agreed to lower the interest rate to what it was before.

Another tip, If you have the average of four credit cards, check to see which is the lowest rate. You may want to call and ask what balance transfer rates will be because credit card companies compete and offer very low rates for balance transfers. There may be a balance transfer fee that you have to pay for doing this. Consolidate as much of your high balance cards to the card with the lowest rate for a balance transfer. This can help reduce the amount of interest you pay every year. Simple things like this can save you hundreds and thousands of dollars in the long run.

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